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A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   ____________ What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   _________--- What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after twelve years: CY:   ______% YTM: _________  % The bond matures after six years: CY:  _____ % YTM: _____ %

A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   ____________ What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. $   _________--- What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places. The bond matures after twelve years: CY:   ______% YTM: _________  % The bond matures after six years: CY:  _____ % YTM: _____ %

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A $1,000 bond has a coupon of 5 percent and matures after twelve years. Assume that the bond pays interest annually.

  1. What would be the bond's price if comparable debt yields 8 percent? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

    $   ____________

  2. What would be the price if comparable debt yields 8 percent and the bond matures after six years? Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar.

    $   _________---

  3. What are the current yields and the yields to maturity in a and b? Round your answers to two decimal places.

    The bond matures after twelve years:

    CY:   ______%
    YTM: _________  %

    The bond matures after six years:

    CY:  _____ %
    YTM: _____ %

Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g. year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 7. 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 8. 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778
Transcribed Image Text:Interest Factors for the Present Value of an Annuity of One Dollar Time Period (e.g. year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 16% 18% 20% 24% 28% 32% 36% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.893 0.877 0.862 0.847 0.833 0.806 0.781 0.758 0.735 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.690 1.647 1.605 1.566 1.528 1.457 1.392 1.332 1.276 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.402 2.322 2.246 2.174 2.106 1.981 1.868 1.766 1.674 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.798 2.690 2.589 2.404 2.241 2.096 1.966 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.605 3.433 3.274 3.127 2.991 2.745 2.532 2.345 2.181 6 5.795 5.601 5.417 5.242 5.076 4.917 4.766 4.623 4.486 4.355 4.111 3.889 3.685 3.498 3.326 3.020 2.759 2.534 2.399 7. 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.564 4.288 4.039 3.812 3.605 3.242 2.937 2.678 2.455 8. 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 4.968 4.639 4.344 4.078 3.837 3.421 3.076 2.786 2.540 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.985 5.759 5.328 4.946 4.607 4.303 4.031 3.566 3.184 2.868 2.603 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.650 5.216 4.833 4.494 4.193 3.682 3.269 2.930 2.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 5.988 5.453 5.029 4.656 4.327 3.776 3.335 2.978 2.683 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.194 5.660 5.197 4.793 4.439 3.851 3.387 3.013 2.708 13 12.134 11.348 10.635 9.986 9.394 8.534 8.358 7.904 7.487 7.103 6.424 5.842 5.342 4.910 4.533 3.912 3.427 3.040 2.727 14 13.004 12.106 11.296 10.563 9.899 9.295 8.745 8.244 7.786 7.367 6.628 6.002 5.468 5.008 4.611 3.962 3.459 3.061 2.740 15 13.865 12.849 11.938 11.118 10.380 9.712 9.108 8.559 8.060 7.606 6.811 6.142 5.575 5.092 4.675 4.001 3.483 3.076 2.750 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.312 7.824 6.974 6.265 5.669 5.162 4.730 4.003 3.503 3.088 2.758 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 9.122 8.544 8.002 7.120 6.373 5.749 5.222 4.775 4.059 3.518 3.097 2.763 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.250 6.467 5.818 5.273 4.812 4.080 3.529 3.104 2.767 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.366 6.550 5.877 5.316 4.844 4.097 3.539 3.109 2.770 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.128 8.514 7.469 6.623 5.929 5.353 4.870 4.110 3.546 3.113 2.772 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 7.843 6.873 6.097 5.467 4.948 4.147 3.564 3.122 2.776 30 25.808 22.937 19.600 17.292 15.373 13.765 12.409 11.258 10.274 9.427 8.055 7.003 6.177 5.517 4.979 4.160 3.569 3.124 2.778
Interest Factors for the Present Value of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 24% 28% .926 .857 962 952 .806 .650 1 .990 .980 971 .943 935 917 .909 .893 .877 .870 .862 .847 .833 .781 .842 772 .610 477 2 980 .961 943 925 907 .890 .873 .826 797 .769 .756 .658 743 718 .694 971 .942 .915 889 .864 .840 .816 .794 .751 .712 .675 .641 .609 579 .524 4 961 924 .889 .855 .823 .792 .763 .713 .735 .708 .683 .636 592 .572 552 .516 482 423 373 951 906 863 822 784 .747 .681 650 .621 .567 519 497 476 437 402 341 291 .942 888 .838 790 .746 .705 .666 .630 .596 564 507 456 432 410 370 335 .275 227 7 933 .871 .813 .760 .711 .665 .623 583 547 .513 452 400 376 354 314 .279 222 .178 .139 108 8. 923 .853 467 .789 .766 731 .677 .627 .582 540 502 404 351 327 305 .266 .233 .179 914 .837 .703 645 592 .544 500 .144 460 422 424 361 308 .284 263 226 194 10 905 .820 .744 .676 .614 558 508 463 386 322 .270 247 .227 .191 .162 .116 .085 .650 .625 .601 11 .896 804 .722 .585 .527 475 429 .388 350 287 .094 .237 208 215 .195 .162 135 .066 887 879 12 788 .701 .557 .497 444 397 356 319 .257 187 .168 .137 .112 .076 .052 13 773 .681 .530 469 415 368 326 .290 .229 .182 .163 .145 .116 .093 .061 .040 14 15 .160 .140 .099 .084 .870 758 743 505 .442 417 .299 .078 .065 .661 577 388 340 .263 205 141 .125 .049 .032 .861 .642 .555 .481 362 315 275 .239 .183 .123 .108 .040 .025 .458 .436 16 .853 .728 .623 534 .394 339 .292 .252 .218 .198 .163 123 .107 .093 .071 .054 .032 .019 .015 17 .844 .714 .605 513 371 317 .270 .231 .026 .146 .130 .108 .093 .080 .060 .045 296 276 258 700 .350 331 18 .836 .587 494 416 .250 .212 .180 .095 .081 .069 .051 .038 .021 .012 19 .828 .686 570 475 396 .232 .194 .164 .009 .116 .104 .083 .070 .060 .043 .031 .017 014 20 .820 673 554 456 377 312 215 .178 .149 .073 .061 .051 .037 .026 .007 25 780 610 478 375 .295 233 .184 .146 .116 .092 .059 .038 .030 .024 .016 .010 .005 .002 30 742 552 .412 308 .231 .174 .131 .099 .075 .057 .033 .020 .015 .012 .007 .004 .002 .001
Transcribed Image Text:Interest Factors for the Present Value of One Dollar Time Period (e.g., year) 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 24% 28% .926 .857 962 952 .806 .650 1 .990 .980 971 .943 935 917 .909 .893 .877 .870 .862 .847 .833 .781 .842 772 .610 477 2 980 .961 943 925 907 .890 .873 .826 797 .769 .756 .658 743 718 .694 971 .942 .915 889 .864 .840 .816 .794 .751 .712 .675 .641 .609 579 .524 4 961 924 .889 .855 .823 .792 .763 .713 .735 .708 .683 .636 592 .572 552 .516 482 423 373 951 906 863 822 784 .747 .681 650 .621 .567 519 497 476 437 402 341 291 .942 888 .838 790 .746 .705 .666 .630 .596 564 507 456 432 410 370 335 .275 227 7 933 .871 .813 .760 .711 .665 .623 583 547 .513 452 400 376 354 314 .279 222 .178 .139 108 8. 923 .853 467 .789 .766 731 .677 .627 .582 540 502 404 351 327 305 .266 .233 .179 914 .837 .703 645 592 .544 500 .144 460 422 424 361 308 .284 263 226 194 10 905 .820 .744 .676 .614 558 508 463 386 322 .270 247 .227 .191 .162 .116 .085 .650 .625 .601 11 .896 804 .722 .585 .527 475 429 .388 350 287 .094 .237 208 215 .195 .162 135 .066 887 879 12 788 .701 .557 .497 444 397 356 319 .257 187 .168 .137 .112 .076 .052 13 773 .681 .530 469 415 368 326 .290 .229 .182 .163 .145 .116 .093 .061 .040 14 15 .160 .140 .099 .084 .870 758 743 505 .442 417 .299 .078 .065 .661 577 388 340 .263 205 141 .125 .049 .032 .861 .642 .555 .481 362 315 275 .239 .183 .123 .108 .040 .025 .458 .436 16 .853 .728 .623 534 .394 339 .292 .252 .218 .198 .163 123 .107 .093 .071 .054 .032 .019 .015 17 .844 .714 .605 513 371 317 .270 .231 .026 .146 .130 .108 .093 .080 .060 .045 296 276 258 700 .350 331 18 .836 .587 494 416 .250 .212 .180 .095 .081 .069 .051 .038 .021 .012 19 .828 .686 570 475 396 .232 .194 .164 .009 .116 .104 .083 .070 .060 .043 .031 .017 014 20 .820 673 554 456 377 312 215 .178 .149 .073 .061 .051 .037 .026 .007 25 780 610 478 375 .295 233 .184 .146 .116 .092 .059 .038 .030 .024 .016 .010 .005 .002 30 742 552 .412 308 .231 .174 .131 .099 .075 .057 .033 .020 .015 .012 .007 .004 .002 .001
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